Drywall distributor knew about complaints, but didn't alert buyers

May 19, 2010

Written by

The News-Press Wire Services

8:44 P.M. — MIAMI — A Florida drywall distributor knew four years ago that it had supplied problematic wallboard to homebuilders, according to a major Chinese drywall manufacturer, but it never told consumers about the problems.

When Banner Supply turned to Knauf Plasterboard Tianjin, or KPT, with complaints from builders, the Chinese manufacturer replaced Banner’s inventory of Chinese-made drywall with American-made products. But Banner Supply never said anything about the complaints to the government or to customers who didn’t complain, information that could have prevented thousands of homeowners from getting into the expensive, potentially hazardous predicaments they now face.

Next month, several lawsuits against Banner are scheduled to go to trial in Miami-Dade Circuit Court, the first to be heard in Florida. One attorney who is representing homeowners is pushing the courts to unseal confidential agreements Banner made in 2007 — including one with KPT.

“These documents should be made public,” Miami attorney Victor Diaz said. “They are of enormous public interest.”

Diaz’s case could bring to light efforts of manufacturers and distributors to keep the information from homeowners and government agencies, a disclosure that could have reduced the legion of complaints about imported drywall.

Sulfur compounds emitted from the wallboard are blamed for corroding appliances and causing pervasive odors and respiratory problems. Possible remedies include gutting the house; many insurance companies will not cover those costs, leaving affected homeowners to turn to the courts.

Although KPT would not provide the confidential agreement it signed with Banner, the company told McClatchy Newspapers it replaced about 2.2 million square feet of Banner’s drywall supply in 2007, after the company — one of the state’s largest drywall suppliers — contacted them about odor complaints and concerns about emissions from the wallboard in late 2006.

An average home uses 9,000 to 10,000 square feet of drywall, according to the Gypsum Association. By those numbers, Banner’s replaced product could be enough for more than 230 homes.

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U.S. government agencies have confirmed that defective drywall emissions corrode appliances and ruin wiring and other metals, but tests for health problems are ongoing. In federal court in Louisiana, where cases against drywall manufacturers are being heard, KPT has said its drywall is defective and unfit for its intended purpose.

The company, the only Chinese company responding to U.S. court proceedings, settled out of court with builder Beazer Homes this week, offering to pay to remediate homes in two developments in southwest Florida constructed with KPT drywall.

Earlier in 2006, an Arkansas toxicology company hired by KPT tested the drywall and found that it emitted sulfur-containing compounds at higher concentrations than found naturally in the air. But the findings weren’t seen as being severe enough to ignite a public health concern.

While some foreign manufacturers have reported health- or life-threatening defects with their products to the U.S. government, they aren’t required to do so, said Scott Wolfson, spokesman for the Consumer Product Safety Commission.

But anyone else in the chain — American importers, distributors like Banner and so on — must disclose problems.

“That reporting obligation becomes effective when you have a violation of a safety standard — information that the product could or does pose a substantial product hazard or that a consumer would face an unreasonable risk of injury from the product,” Wolfson said.

But it’s not clear exactly what Banner knew. The company’s general manager referred calls to an attorney who did not return phone calls.

In a statement this week to McClatchy Newspapers, KPT spokesman Don Hayden said that “because there was no basis for any health or safety concern, we did not contact the (Consumer Product Safety Commission) or any other government agency. When issues were later raised about impact to other components of the house such as appliances in the summer and fall of 2008, we participated in investigations by both state and federal agencies.”